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THE GOVERNMENT'S BIG LIE ABOUT THE POSTAL SERVICE

Once again we have one of those government-commissioned studies to point the United States Postal Service on a sustainable path …

Of course, it is all bullshit because the United States Postal Service consists of unionized government workers who tend to vote for progressive socialist democrats who are willing to look the other way while kicking the can down the road and raising the prices of postal-related services.

It all started with an unwise political mistake that perpetuated union domination in an era of rising competition…

In 1967, President Johnson formed a Commission on Postal Organization, the “KappelCommission,” to examine the Department. The Commission’s findings served as the basisfor the 1970 Postal Reorganization Act (PRA).

This law (1) created the new USPS as an independent establishment of the executive branch of the government; (2) established a Board of Governors, who would select the Postmaster General; (3) directed USPS to become a self-funded entity, without a taxpayer subsidy; (4) retained postal employees as members of the civil service, but permitted postal unions to bargain over wages and benefits; and (5) established a new Postal Rate Commission to review and make recommendations on postal rates.

There is no practical way to sustain any organization with politically-connected leadership and dominated by progressive labor unions whose business model is based on socialism and is basically anti-competitive.

Current law specifies that the officers and employees of USPS “shall be in the postal career service, which shall be part of the civil service.”

Career postal employees are represented by nine unions and two management associations.

[OCS: All of these organizations: American Postal Workers Union, National Active and Retired Federal Employees Association, National Association of Letter Carriers, National Association of Postal Supervisors, National Postal Mail Handlers Union, National Rural Letter Carriers’ Association, and the United Postmasters of America are disproportionately comprised of democrats who represent enough votes to sway congressional elections and scare the bejesus out of politicians on both sides of the aisle.]

Postal workers, like most federal civil service employees, participate in the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS), as well as in the Federal Employees Health Benefits Program (FEHB), and are covered by the Federal Employees Compensation Act for workers’ compensation claims.

However, unlike other federal workers, the PRA authorizes collective bargaining on compensation, some benefits, and conditions of employment, and postal unions are therefore able to negotiate compensation, benefits, and working conditions.

Given their federal employee status and the role that the USPS plays in the economy, USPS employees maintain a unique collective bargaining position. They can bargain for wages and benefits as private sector unions do, without the same level of risk that their company will go out of business.

[OCS: Or that a strike will result in mass layoffs without the necessity to re-hire the entire workforce.]

In recent years, the USPS has been able to achieve limited labor reforms. Postal salarieshave risen at slower rates than those in the private sector, collective bargaining agreementshave gradually transferred a portion of health premiums from the USPS to individualworkers, and the USPS has been able to lower the number of employees, from a high ofover 905,000 in 1999 to around 634,000 in 2018, relying more heavily on non-careeremployees.

However, the USPS’s labor costs continue to represent a significantly higher proportion of total operating costs than its private sector competitors.

Additionally, “no layoff” clauses exist in many of the USPS’s collective bargaining agreements, limiting management’s ability to adapt the USPS’s business model.

[OCS: In the USPS it is hard to terminate any employee without a long and costly procedure that involves union representation and the result is likely to be overturned on appeal to a politically-aware board. Incompetence is not a crime nor a punishable offense in the unionized world of the USPS. It is far more likely for fast and efficient workers to be throttled-back by their peers lest they make the entire group look bad or accidently, heaven forbid, set a new performance requirement.]

Long-Term Liabilities

Despite the USPS’s attempts to contain labor costs, each of its three major benefit programs imposes a large long-term liability on the USPS unrelated to either the productivity of its workforce or the “profitability” of the USPS. While the USPS can negotiate some of the cost sharing of these benefits, the provision of these benefits is governed by statute.

The USPS has over $126 billion in unfunded worker liabilities stemming from its pensions ($43.5 billion), retiree health benefits ($66.5 billion), and the federal workers’ compensation program ($16.4 billion).

[OCS: I defy anyone to show me how a company, even a Microsoft or Amazon, can rationally deal with billions in unfunded worker liabilities and the ongoing debt service of an aging group of retirees who contribute nothing to the enterprise.]

Pensions

As noted above, Postal workers, like most federal civil service employees, participate in theCivil Service Retirement System (CSRS) or the Federal Employees Retirement System(FERS). The combined USPS unfunded liability for these programs was $43.5 billion as ofthe end of FY 2018. The USPS, like federal agencies, cannot change the structure of these benefits.

Although the 1974 Employee Retirement Income Security Act prevents private companies from taking away pension benefits that workers have already earned, it allows them to end all accruals going forward, even for current employees. There is an ongoing trend for private companies to either end future accruals or terminate their defined benefit plans altogether to reduce the amount of long-term liabilities on their books.

[OCS: It is hard to believe that Congress, with the sole power of the purse, cannot put forth constitutionally acceptable legislation that would remove union influence from government institutions and reform government pension plans.]

Bottom line…

The United States Postal Service is doomed as no business model that is anti-competitive, rewards seniority over merit, parses positions to generate additional jobs (and union memberships), and that does not hold people to account for their productivity is likely to be sustainable in any real-world economy.

How can you possibly recover when you are billions in the hole and profits cannot cover costs plus debt service. In the real world, this is called insolvency and leads to a court proceeding known as bankruptcy.

Now it appears that the only politically expedient resolution is to engage in a form of wealth redistribution – forcing higher costs on large-scale shippers and passing seventy-six cents out of every cost dollar to unionized workers.

We are so screwed.

-- steve

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

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THE GOVERNMENT'S BIG LIE ABOUT THE POSTAL SERVICE

Once again we have one of those government-commissioned studies to point the United States Postal Service on a sustainable path …

Of course, it is all bullshit because the United States Postal Service consists of unionized government workers who tend to vote for progressive socialist democrats who are willing to look the other way while kicking the can down the road and raising the prices of postal-related services.

It all started with an unwise political mistake that perpetuated union domination in an era of rising competition…

In 1967, President Johnson formed a Commission on Postal Organization, the “KappelCommission,” to examine the Department. The Commission’s findings served as the basisfor the 1970 Postal Reorganization Act (PRA).

This law (1) created the new USPS as an independent establishment of the executive branch of the government; (2) established a Board of Governors, who would select the Postmaster General; (3) directed USPS to become a self-funded entity, without a taxpayer subsidy; (4) retained postal employees as members of the civil service, but permitted postal unions to bargain over wages and benefits; and (5) established a new Postal Rate Commission to review and make recommendations on postal rates.

There is no practical way to sustain any organization with politically-connected leadership and dominated by progressive labor unions whose business model is based on socialism and is basically anti-competitive.

Current law specifies that the officers and employees of USPS “shall be in the postal career service, which shall be part of the civil service.”

Career postal employees are represented by nine unions and two management associations.

[OCS: All of these organizations: American Postal Workers Union, National Active and Retired Federal Employees Association, National Association of Letter Carriers, National Association of Postal Supervisors, National Postal Mail Handlers Union, National Rural Letter Carriers’ Association, and the United Postmasters of America are disproportionately comprised of democrats who represent enough votes to sway congressional elections and scare the bejesus out of politicians on both sides of the aisle.]

Postal workers, like most federal civil service employees, participate in the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS), as well as in the Federal Employees Health Benefits Program (FEHB), and are covered by the Federal Employees Compensation Act for workers’ compensation claims.

However, unlike other federal workers, the PRA authorizes collective bargaining on compensation, some benefits, and conditions of employment, and postal unions are therefore able to negotiate compensation, benefits, and working conditions.

Given their federal employee status and the role that the USPS plays in the economy, USPS employees maintain a unique collective bargaining position. They can bargain for wages and benefits as private sector unions do, without the same level of risk that their company will go out of business.

[OCS: Or that a strike will result in mass layoffs without the necessity to re-hire the entire workforce.]

In recent years, the USPS has been able to achieve limited labor reforms. Postal salarieshave risen at slower rates than those in the private sector, collective bargaining agreementshave gradually transferred a portion of health premiums from the USPS to individualworkers, and the USPS has been able to lower the number of employees, from a high ofover 905,000 in 1999 to around 634,000 in 2018, relying more heavily on non-careeremployees.

However, the USPS’s labor costs continue to represent a significantly higher proportion of total operating costs than its private sector competitors.

Additionally, “no layoff” clauses exist in many of the USPS’s collective bargaining agreements, limiting management’s ability to adapt the USPS’s business model.

[OCS: In the USPS it is hard to terminate any employee without a long and costly procedure that involves union representation and the result is likely to be overturned on appeal to a politically-aware board. Incompetence is not a crime nor a punishable offense in the unionized world of the USPS. It is far more likely for fast and efficient workers to be throttled-back by their peers lest they make the entire group look bad or accidently, heaven forbid, set a new performance requirement.]

Long-Term Liabilities

Despite the USPS’s attempts to contain labor costs, each of its three major benefit programs imposes a large long-term liability on the USPS unrelated to either the productivity of its workforce or the “profitability” of the USPS. While the USPS can negotiate some of the cost sharing of these benefits, the provision of these benefits is governed by statute.

The USPS has over $126 billion in unfunded worker liabilities stemming from its pensions ($43.5 billion), retiree health benefits ($66.5 billion), and the federal workers’ compensation program ($16.4 billion).

[OCS: I defy anyone to show me how a company, even a Microsoft or Amazon, can rationally deal with billions in unfunded worker liabilities and the ongoing debt service of an aging group of retirees who contribute nothing to the enterprise.]

Pensions

As noted above, Postal workers, like most federal civil service employees, participate in theCivil Service Retirement System (CSRS) or the Federal Employees Retirement System(FERS). The combined USPS unfunded liability for these programs was $43.5 billion as ofthe end of FY 2018. The USPS, like federal agencies, cannot change the structure of these benefits.

Although the 1974 Employee Retirement Income Security Act prevents private companies from taking away pension benefits that workers have already earned, it allows them to end all accruals going forward, even for current employees. There is an ongoing trend for private companies to either end future accruals or terminate their defined benefit plans altogether to reduce the amount of long-term liabilities on their books.

[OCS: It is hard to believe that Congress, with the sole power of the purse, cannot put forth constitutionally acceptable legislation that would remove union influence from government institutions and reform government pension plans.]

Bottom line…

The United States Postal Service is doomed as no business model that is anti-competitive, rewards seniority over merit, parses positions to generate additional jobs (and union memberships), and that does not hold people to account for their productivity is likely to be sustainable in any real-world economy.

How can you possibly recover when you are billions in the hole and profits cannot cover costs plus debt service. In the real world, this is called insolvency and leads to a court proceeding known as bankruptcy.

Now it appears that the only politically expedient resolution is to engage in a form of wealth redistribution – forcing higher costs on large-scale shippers and passing seventy-six cents out of every cost dollar to unionized workers.